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What federal government must do to assist small business in the recovery

What federal government must do to assist small business in the recovery
© Greg Nash

The federal government is working behind the scenes with the business community in Florida, and across the country, to donate masks to keep employees safe and start reopenings in the economy. Surgeon General Jerome Adams had visited Sergios in Miami last month to announce the distribution of one million masks to restaurants in Florida.

This initiative between the Department of Health and Human Services and the Florida Restaurant and Lodging Association is just one instance of the public private partnerships needed to restore the country to our standing before the pandemic. Indeed, the economy shrank by over 32 percent for the second quarter due to the coronavirus, and the unemployment rate is 10 percent, according to recent federal government data.

To help small businesses lift the country out of the recession, the federal government must make a commitment to passing liability protections for employers so they can reopen with confidence. While the latest stimulus deal is stalled in Congress, lawmakers must make a commitment that any bill includes liability protections as a condition of passage.

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Small businesses already face significant hurdles to reopening in trying to balance public health mandates, employee and customer safety, and their profitability. Ruinous lawsuits from greedy trial lawyers over claims related to the pandemic will prevent some small firms from ever reopening. In the broader coronavirus relief bill known as the Heals Act, Senate Republicans have proposed liability protection prohibiting lawsuits against businesses that follow public health guidelines but permitting them in cases of gross negligence. This sensible strategy strikes the best balance.

According to Hunton Andrews Kurth, there have been over 3,000 lawsuits related to the pandemic filed across the country, showing us that liability protections are necessary. Some states have passed such provisions, but legislation is warranted on a national scale. Senate Majority Leader Mitch McConnell appears to agree. “There is no chance of the country getting back to normal without this. We are not going to let trial lawyers throw a party on the backs of the frontline workers and institutions.”

While Congress is in a stalemate, the federal government is doing what it can through executive order. President Trump has deferred the employee portion of the payroll tax for the employees earning less than $104,000 a year. This relief rewards employees for returning to work. It allows them to keep more of their checks to pay their bills and shop in their communities. For most employees, the payroll tax is the biggest tax burden for them, so suspending it will provide real relief when it is needed most.

This tax deferral also assists employers, which have been having a difficult time with rehiring their staff members, many of whom can earn more from the supplemental unemployment benefits than returning to work. The tax break incentivizes employees to return, so employers can ramp up as the country reopens. President Trump extended unemployment benefits, but at a lower rate, so work looks comparatively more attractive.

As the great initiative between the federal government and the business community in Florida and the executive order demonstrate, Washington plays a role in the economic recovery led by small businesses. Congress could further accelerate this by passing coronavirus liability protections then forgiving the payroll tax liability that the executive order suspends. Only small businesses, the greatest economic growth force in the world, can restore the country to its success before the coronavirus.

Carlos Gazitua serves as president and chief executive officer of Sergios Restaurants in Florida and member of the Job Creators Network. Alfredo Ortiz is president and chief executive officer of the Job Creators Network.